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8/26/2004
07:16 PM
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Feds Crack Down On Cybercrime

A new aggressive stance against illegal file sharing, combined with a dragnet against spammers, defines the Justice Department's proactive stance against cybercrime.

The feds are cracking down on cybercrime.

Amid rumors that cyberterrorists planned to disrupt the Internet on Thursday, the Justice Department revealed major enforcement actions against identity thieves and spammers. The day before, DOJ officials said at a press conference that federal agents had served six warrants in New York, Texas, and Wisconsin against five residences and one Internet service provider as part of an investigation of illegal file trading over peer-to-peer networks.

"Today's actions send an important message to those who steal over the Internet. When online thieves illegally distribute copyrighted programs and products, they put the livelihoods of millions of hard-working Americans at risk and damage our economy," Attorney General John Ashcroft said. "The execution of today's warrants disrupted an extensive peer-to-peer network suspected of enabling users to traffic illegally in music, films, software, and published works. The Department of Justice is committed to enforcing intellectual-property laws, and we will pursue those who steal copyrighted materials even when they try to hide behind the false anonymity of peer-to-peer networks."

Count on more such cases, focused on users of peer-to-peer networks, being filed in the future. The 9th Circuit Court of Appeals last week affirmed a lower court ruling that peer-to-peer network owners are not liable for contributory copyright infringement arising from the actions of their users. Without the ability to shut down the networks, aggrieved copyright owners will have to pursue individual infringers.

In response, the Recording Industry Association of America issued a statement: "This decision does nothing to absolve these businesses from their responsibility as corporate citizens to address the rampant illegal use of their networks. We will continue to pursue legislative solutions and legal actions to address the ongoing illegal activity facilitated by Grokster and other P2P services."

True to its word, the music industry group on Wednesday filed lawsuits against 744 more users of online file-sharing networks, bringing the total number of cases it has filed since September to about 4,700.

The group's lawyers may be busy for a while: A recent survey by research firm Pollara estimated that 26% of music consumers had used Kazaa's file-sharing network in spring 2004, up from 8% in fall 2001. However, it's also worth noting that according to music industry tracking service Nielsen SoundScan, there were 54 million legal downloads in the first half of 2004, up from 19 million during the last half of 2003.

On Thursday, Justice Department officials announced the conclusion of "Operation Web Snare," which began on June 1 and culminated in 103 arrests and 53 convictions for cybercrimes that affected some 150,000 victims who lost more than $215 million. These investigations cover a variety of computer-related crimes, including computer intrusions, counterfeit software identity, fraud, theft, and other intellectual-property crimes.

Some of the credit for the government's cybercrime actions belongs to the business community, which contributed funds for the investigations. Previous cybercrime prosecutions have been driven by the government or by industry players separately. In April, the government disclosed its first criminal prosecutions under the Can-Spam Act. The month before, America Online, EarthLink, Microsoft, and Yahoo used the law to file civil actions.

But where in the past companies may have offered data to the feds, they're now donating dollars. The Direct Marketing Association anted up $500,000 in support of these investigations. Since June, the DMA has been backing "Operation Slam Spam," which it described in a release as "a public/private alliance between the FBI and the DMA to combat spam, in which the DMA has devoted significant funds and resources."

The DMA is funding the war against spam to save E-commerce from itself. Spammers, says Jerry Cerasale, senior VP of government affairs, are undermining trust in E-mail as a commercial medium.

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